New investor seeks advice prior taking the plunge

[Wayne]

I am new to real estate investing and am seeking advice. I bought a rental property in 2002 with a tenant in place for $100,000. I moved into the house in 2002 and still live there today. I have approx $175-$190K in equity in the home. The house needs works, and will probably be torn down and a new home built. It would cost me $$$ to repair, but the longer I stay, the more its worth. Not too bad for 5 years I thought.

I would like to ultimately own 3 homes within the next year. I have spoken with mortgage brokers and my bank. I am in good standing and my credit is superb. I have been pre approved for approx $500-$600K on my own.

I have a couple properties in mind on Vancouver Island (Nanaimo... I live on the mainland). They are fully rented top and bottom homes. The rent would cover rent, taxes, property management etc, with possible mild positive cash flow. This clacualation is based on 10% down on a 40 mortgage.

I`ve been contemplating:

1) selling my home and moving away and investing on Vanc Island - primary residence
plus 2 homes.
2) keeping my home and buying a rental home in Abbotsford BC, and Nanaimo ???

Maybe I should pull the equity out of my current home ????

I would like to continue investing in even more proprties after the initial 3.
I seek to ensure I`m strategizing correctly.

Any advice from seasoned investors would be greatly appreciated.


Thanks in advance,

Wayne

 

[MikeMcCrae]

Hi Wayne,
Sit down with your broker and figure out the best way to finance your new purchases. Set a timeline goal to buy your first one. Say 30 days and make your move.

 

[DonCampbell]

Take the time it takes to complete your goldmine score-card (in the back of the book Real Estate Investing in Canada or in much more detail in the Quickstart Program - being presented by me in Vancouver on Feb 16th and 17th) on the two regions (with a special focus on expected employment growth comparisons.)

Also download the Gateway Effect Report from this site, and try to catch CTV news in Vancouver as they are discussing the "Diamond Triangle" in the Lower Mainland. Where the growth and demand is set to be the strongest over the next decade. Take the emotions out of the equation and focus on where your money will work the hardest for you, with the least risk.

 

[PeterKinchMortgageTeam]

QUOTE (Wayne @ Jan 28 2008, 05:48 PM) I am new to real estate investing and am seeking advice. I bought a rental property in 2002 with a tenant in place for $100,000. I moved into the house in 2002 and still live there today. I have approx $175-$190K in equity in the home. The house needs works, and will probably be torn down and a new home built. It would cost me $$$ to repair, but the longer I stay, the more its worth. Not too bad for 5 years I thought.

I would like to ultimately own 3 homes within the next year. I have spoken with mortgage brokers and my bank. I am in good standing and my credit is superb. I have been pre approved for approx $500-$600K on my own.

I have a couple properties in mind on Vancouver Island (Nanaimo... I live on the mainland). They are fully rented top and bottom homes. The rent would cover rent, taxes, property management etc, with possible mild positive cash flow. This clacualation is based on 10% down on a 40 mortgage.

I`ve been contemplating:

1) selling my home and moving away and investing on Vanc Island - primary residence
plus 2 homes.
2) keeping my home and buying a rental home in Abbotsford BC, and Nanaimo ???

Maybe I should pull the equity out of my current home ????

I would like to continue investing in even more proprties after the initial 3.
I seek to ensure I`m strategizing correctly.

Any advice from seasoned investors would be greatly appreciated.


Thanks in advance,

Wayne

Make sure your broker and banker is aware of your long term financing goals - and that they are taken into consideration before you make any purchases or do any refinances. It`s really difficult to make financing suggestions without a full application, and knowledge of your long term goals, though in most cases you`d be better off taking equity out of your principal residence as opposed to purchasing high ratio rental properties (premium is much cheaper.....)

A broker that is investor oriented will be able to help you structure your purchases and refiances to protect your ability to continue to get financing - and help you to achieve your goals.

 

[Wayne]

QUOTE (CanadianMortgageTeam @ Jan 29 2008, 01:24 PM) Make sure your broker and banker is aware of your long term financing goals - and that they are taken into consideration before you make any purchases or do any refinances. It`s really difficult to make financing suggestions without a full application, and knowledge of your long term goals, though in most cases you`d be better off taking equity out of your principal residence as opposed to purchasing high ratio rental properties (premium is much cheaper.....)

A broker that is investor oriented will be able to help you structure your purchases and refiances to protect your ability to continue to get financing - and help you to achieve your goals.


Thanks Peter,

I contacted your office and left a message for Rob Mcdonald. I look forward to speaking
with him and moving forward.



Wayne